NOTE 9. LEASES

The Company leases office space for its corporate headquarters in Pasadena, California. The lease expires January 31, 2018. Rental costs are approximately $13,000 per month, increasing 3% annually.

The Company’s research facility in Madison, Wisconsin is leased through February 28, 2019. Monthly rental expense is approximately $22,000. Other monthly rental expenses include common area maintenance and real estate taxes totaling approximately $13,000 per month. Utilities costs are approximately $15,000 per month. Including monthly payments recorded under a capital lease of approximately $21,000, total monthly costs are approximately $71,000 per month.

Facility and equipment rent expense, related to continuing operations, for three months ended December 31, 2013 and 2012 was $130,000 and $145,000, respectively. From inception to date, rent expense was $4,790,000.

As of December 31, 2013, future minimum lease payments due in fiscal years under capitalized leases are as follows:

2014 (remainder of)	$	192,634
2015		256,846
2016		256,846
2017		256,846
2018		256,846
2019 and thereafter		107,019
Less interest		(99,294	)
Principal		1,227,743
Less current portion		(221,345	)
Noncurrent portion	$	1,006,398

As of December 31, 2013, future minimum lease payments due in fiscal years under operating leases are as follows:

2014 (remainder of)	$	325,672
2015		445,921
2016		457,961
2017		470,154
2018		359,370
2019 and thereafter		125,415
Total	$	2,184,493